As the world's largest media company pushes divisions to present a unified face to the ad community and create multimedia packages for marketers, it is tackling a major problem in the ad business: paperwork.
A cross-division task force, looking to clean up the back office in advertising, hopes to develop an Internet-based system for exchange of electronic documents. Advertisers signing multiplatform ad deals would have the option of conducting business via the Net or on paper for proposals, contracts and invoices for ad buys that cross multiple divisions. This would eliminate the need to do separate paperwork with each division on those broad deals.
AOL Time Warner's move is the latest sign of how advertising-finally-is turning to technology to connect buyers and sellers.
The proposed forms-which would include the documents media companies send to advertisers detailing where and when ads run-would allow AOL Time Warner to send single documents to advertisers for the wide-ranging deals instead of separate documents from the different company divisions included in the deal.
The AOL Time Warner initiative comes as major agency holding companies Interpublic Group of Cos., Omnicom Group and WPP Group form an independent company, led by outgoing Initiative Media CEO Michael Lotito, to develop a standardized Internet-based system for transactions and invoices across various media platforms.
"Clearly the major agency holding groups are looking to create standardization and automation, and we're doing the same thing," said Larry Goodman, president-sales and marketing for AOL Time Warner's CNN. "It would be great to have a proposal system and invoicing system that captures multi-media. You need to be in a position operationally to execute what you sell. It would be a whole lot easier for us and our clients if that was done through single contracts, single proposals and single invoices."
Though some might interpret the move as part of a plan by AOL Time Warner to expand the practice of the former AOL of doing business directly with marketers and avoiding ad agencies, AOL Time Warner executives said it is simply a way to improve the process for all parties. AOL bought Time Warner in January, creating the world's largest media company.
It is unclear when the new system will be approved and put into circulation. As it stands now, advertisers who agree to multiplatform deals with AOL Time Warner may still deal separately with individual divisions. For example, an advertiser or agency that makes a deal to reach stock-market investors through Turner Broadcasting System's CNN, Time Inc.'s Money and America Online's Personal Finance channel could receive separate contracts and invoices. AOL Time Warner executives believe that's unnecessary and unwieldy.
A Turner spokesman said the documents in development are intended for cross-media deals only and are not expected to be employed by individual AOL Time Warner units for deals between one division and an advertiser, though units may choose to use them. "No one's trying to intrude or change or impinge upon individual businesses," the spokesman said. "The goal has always been to automate and make it more efficient when there are cross-business initiatives."
The task force consists of operations and finance executives from Turner, Time Inc., WB network and America Online-units that rely the most on ad dollars (the WB has been folded under the Turner umbrella). It is effectively a subcommittee of the Ad Council-a group of AOL Time Warner senior executives who meet every other week to discuss ways to promote sales across divisions. The task force has worked with the Ad Council on issues involving how money that flows into the company in cross-media deals gets distributed among divisions.
The group's aim-to standardize the back-end process and develop single documents that can centralize the expansive deals at every step in the process-is ambitious. "Buying and selling for each division is different," said Mike Stockel, a task force member and VP-interactive ad systems strategies at Turner. The task force has held meetings since November, with the approximately six executive members shifting over time.
After the merger of AOL and Time Warner closed, the group worked on shepherding through the company the early multi-platform deals. AOL Time Warner has inked nine multiplatform deals since January, but Wall Street is counting on the company to make those kinds of deals a staple of its business before it deems the largest merger in corporate history a success.
Contributing: Jon Fine